New Parliamentary Expenses and Entitlements Authority Legislation and No More Gold Pass

Wednesday 22 February 2017 @ 10.56 a.m. | Judiciary, Legal Profession & Procedure | Legal Research

On 9 February 2017, the Prime Minister, Malcolm Turnbull, introduced new legislation, namely the: Independent Parliamentary Expenses Authority Bill 2017 (The IPEA Bill) and the Independent Parliamentary Expenses Authority (Consequential Amendments) Bill 2017 (the Consequential Amendments Bill) into the House of Representatives, to set up an independent parliamentary expenses authority.

In his second reading speech the Prime Minister said he was following up on a "prior commitment" to establish the Independent Parliamentary Expenses Authority ". . . which will ensure that parliamentarians' work expenses are accountable, transparent, and fair" - saying also:

"Politicians must be accountable for their use of taxpayers' dollars. Australians are entitled to expect that we, their representatives, spend their money carefully, ensuring at all times that our work expenditure represents an ethical, prudent and cost-effective use of public resources. It is taxpayers' money."

The prior commitment referred to by the Prime Minister was the new independent authority, which the Prime Minister first mooted in January 2017 following the events and scandal leading up to the resignation of the former Health Minister Sussan Ley.

The two Bills passed the House of Representatives on 15 February 2017 and were then debated and passed by the Senate on 16 February 2017.

The New Authority

The new Authority established by the IPEA Bill is said by the Prime Minister to be the first step in the ". . . biggest reforms to the management of parliamentarians' expenses in more than a generation".

The Authorities role is described as being independent to be charged with administering and overseeing the "travel and related expenses" of parliamentarians.

This approach of using an independent authority for the task is said to mirror what already happens in a number of other countries, for example, in the United Kingdom.

Key Functions

The new authority's key functions have been identified by the Prime Minister as being:

to audit and report on parliamentarians' work expenses;
to also provide advice on, monitor and administer claims for travel expenses and allowances by parliamentarians and their staff; and
ensuring that taxpayers' funds are spent appropriately and in compliance with the relevant rules.

These functions are, in the Prime Minister's words, to be ". . . provided at arm's length from government". The intent being that such distance (independence) is essential to the maintenance of confidence in the decisions of the new authority, also protecting it against partisanship, and shielding against misuse.

Composition and Operation of the Authority

The new authority is to have an independent board made up of individuals with ". . . diverse yet highly relevant skills, as well as with substantial experience and significant standing within their professions". The new authority's board will be responsible for the statutory functions of the new authority and a chief executive officer (CEO) will manage the its day-to-day operations.

Members of the board will comprise of:

a former judge;
a former member of parliament;
a person who has significant experience, knowledge, and standing in the field of auditing; and
a person with wide experience in remuneration matters.

A board such as the above will according to the Prime Minister show a ". . . depth and breadth of experience" ,such that will allow the new authority to ". . . demonstrate a high standard of independence and accountability".

New Authority Will Help with Complexity

A key point of the Prime Ministers second reading was that the new authority would help with understanding the complex rule and regulations surrounding parliamentary expenses and avoid some of the issues arising to date:

"Under the current system, as we know, parliamentarians and administrators navigate a complex work expenses framework that is comprised of legislation, regulations, determinations, procedural rules, guidelines, conventions and decisions of executive government. . . . The new authority is intended to provide clear and consistent guidance, advice and rulings for parliamentarians."

As an example of the complexity of the current system the Prime Minister referred to the information currently available as follows:

"Currently it is often necessary to read several instruments in order to understand a single work expense. The Department of Finance, for example, has had to produce a suite of eight separate handbooks on the patchwork of legislation and guidelines that form the work expenses framework."

Planned Operation of the New Authority

According to the Prime Minister's second reading speech, the new authority is to commence on 1 July 2017 and, in the period leading up to that, an interim advisory body is be established by executive order which will include a board and will administer travel expenses and allowances, and provide advice and support to parliamentarians on the current parliamentary work expenses system in respect of travel expenses and allowances.

More Legislation to Follow

In his second reading speech, the Prime Minister also indicated that, to compliment the creation of the authority, new legislation to improve the "legislative and administrative framework" of the parliamentary expenses system would follow:

"My government will present a further significant bill to the parliament in the near future which will improve the legislative and administrative framework of the parliamentary work expenses system—further encouraging transparency, accountability and value for money. The IPEA [new authority] will perform its functions both in respect of the current framework, and then the new framework once it has been reformed."

Life Gold Pass Entitlements Also Significantly Altered

On another front related to parliamentary entitlements, the Federal government has also introduced (9 February 2017) and passed (16 February 2017) the Parliamentary Entitlements Legislation Amendment Bill 2017 (the PELA Bill). This PELA Bill immediately axes one of the more generous often criticised retirement perks for Federal politicians, namely, the "life gold travel pass" leaving a situation where only former prime ministers will still be offered more limited free travel under the current arrangements as a mark of respect for the office of Prime Minister.

Specifically, the PELA Bill:

removes parliamentary retirement travel from spouses and de facto partners of all former parliamentarians, other than those of retired former prime ministers, with effect from 14 May 2014;
reduces the amount of parliamentary retirement travel available to former prime ministers, their spouses or de facto partners, effective 14 May 2014;
requires that parliamentary retirement travel undertaken after 14 May 2014 be for the public benefit, and not for a commercial purpose or a private purpose; and
ceases parliamentary retirement travel for former parliamentarians, other than former prime ministers, at the latest with effect from commencement of the bill.

The PELA Bill also amends the definition of "dependent child", for domestic travel purposes, of a minister, presiding officer or opposition office holder from under 25, to under 18 years of age and imposes a 25 percent penalty loading on any claim for a prescribed travel benefit that a parliamentarian subsequently adjusts (either voluntary or involuntary).

Reaction and Comment

The legislation has passed without amendment, the main objections coming from veteran coalition senator Ian Macdonald in respect of the PELA Bill and the fact that key parts of that legislation operated retrospectively. The senator also sought to make a case on behalf of former politicians who perhaps were not payed as much as they would be now and would have seen the gold pass entitlements as part of their earnings as politicians. A line of argument that did not seem to gain much support from any side of parliament.

The Greens were critical of both areas of proposed legislation essentially arguing that more was required and presenting amendments calling for disclosure of how politicians spend their entitlements - such amendments ". . . would have required politicians to produce receipts to show how they spent their $32,000 Electoral Allowances and whether they kept any of the money. The major parties blocked the Greens amendments in the Senate, with a 15-46 vote against the amendments.

Next Steps

Whether the new authority resolves the current problems surrounding parliamentary entitlements and delivers the kind of transparency and accountability described by the Prime Minister when introducing the legislation remains to be seen and will depend very much on the subsequent "framework reform" legislation described in the Prime Minister's speech and yet to be made publicly available.

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.

Sources:

Independent Parliamentary Expenses Authority Bill 2017 [CTH] , Independent Parliamentary Expenses Authority (Consequential Amendments) Bill 2017 [CTH], and Parliamentary Entitlements Legislation Amendment Bill 2017 [CTH] and supporting speeches and explanatory materials as reported in the TimeBase LawOne Service.

Turnbull proposes watchdog to monitor MP expenses (SBS News)

Senate scraps gold pass, votes to establish authority to oversee ex-politicians' entitlements (ABC News)

Politicians reject entitlement allowance reform